So what do I think? In an ideal world I would object to public funds for stadia. Unfortunately there is a competition for sports franchises and I now feel that public subsidies for stadia are unavoidable absent a rich individual willing to construct his/her own facility (like Milwaukee's Bradley Center). Most economists will tell you that stadium deals are generally not worth it. The economic development created is minimal (take a look around Miller Park if you require a real world example) and it mainly serves as an enormous equity boost for the owners. I have a slightly different take.

When public money is used to construct a stadium, a great deal of public scrutiny comes with it. Public financing is always controversial, and once a plan is enacted people tend to pay a great deal of attention to the construction, the expenditures, etc., in an effort to make sure they get their money's worth. As a result of this additional scrutiny, stadium construction is among the most efficient government projects in existence. (Even Miller Park, which suffered a catastrophic crane collapse and a broken retractable roof was more or less on budget, and a great deal of public pressure exists to maintain lawsuits against Mitsubishi for screwing up the job.)

Government is bad at spending money. In Milwaukee we just giveitaway to corrupt people. At least when a community builds a stadium, it can see exactly where the money is going. If any government was given $500 million to spend on something, the odds are they would blow it on something stupid or worthless or corrupt. Basically, I would rather have them spend money on a stadium, as I know exactly what I'm getting. And it is nice to have a pro sports team in town. Maybe not $500 million nice, but nice.

When economists perform cost/benefit analyses on this topic I think they usually compare the stadium project to an ideal use of those funds, or alternatively they compare it to the present value of said funds. This makes the mistake of not assuming government failure. Those funds could be put to better use, but in all likelihood they will be wasted. It may still be a bad idea, and Washington may be doing the right thing (although, in the words of Adam Sandler, they could have let MLB know yesterday), but it is a close call.

The best argument against financing a stadium may be that it almost always comes with a tax increase, and therefore the government is still spending as much as it ever would on stupid, worthless, corrupt projects. While this may be the case, I believe that people have an upper limit on the tax increases they will allow. Therefore, I believe that a stadium tax increase precludes certain other future tax increases. Once again, it may not stop future increases very much, and it may not be worth it. My point here is only this:

The government will take your money, and it will spend your money. A stadium construction project offers a rare opportunity for citizen oversight of government spending. Most government spending is worthless, stupid, and corrupt. Building a stadium precludes, at least slightly, the use of funds on less worthwhile projects. And finally, computing the cost of a stadium project in "real dollars" is disingenuous, as the government rarely gets fair value for its dollar.